Innovation Heroes: Stephen Henry, Kode Biotech

In May, five of New Zealand’s most innovative people are travelling the country to share their stories. Introducing Stephen Henry, CEO and chief science officer of Kode Biotech.

Stephen Henry (Kode Biotech), Dale Clareburt (Weirdly), Lisa King (Eat My Lunch), Glenn Martin (founder and inventor of Martin Jet Pack) and Toni Moves (8i) will share their successes and failures for the benefit of us all, live and in person in Auckland, Wellington, Christchurch and Dunedin.

Today, we talk to Stephen Henry, CEO and chief science officer of Kode Biotech, named Supreme New Zealand Innovator at the New Zealand Innovators Awards 2015.

Last time we talked, you were still just an Innovation Awards finalist. How did it feel to win the Supreme New Zealand Innovator award?

It was a big surprise. I thought we had a reasonable chance of picking up in the health innovation area, but I was very very surprised that we'd picked up the overall one. Not to say that I didn't think we deserved it, more that I didn't think they'd get it.

Why not?

It's really hard to explain the technology. It's something you can't see. You can show me a jetpack and I can see it and I can understand it, and I can do it. But if I try and tell you about Kode technology, and nanotechnology that you can't see, it's a much harder story to tell.

One thing that was missed in the Innovation Awards was the application Kode won for was one of many different applications, less than five per cent of our portfolio, but they could easily engage with one aspect of it rather than the whole platform. The whole platform is too complex.

What about after the awards, after all the publicity, did people get it?

It's a bit like telling my dad a joke. I tell him the joke and he laughs. You hear him laugh the next day and that's when he thinks he gets it. You hear him laugh a day later and that's when he might have got it, but then when you ask him if he got it, he doesn't get it. It's a bit like what we've got. We explain and people go, 'Oh yeah, that's cool' and then they explain it back to you and it's not even on this planet.

What we learnt from the Innovation Awards is we submitted a video with our technology and that's the only way they could understand what the technology was, and it had a big 'wow' factor. what that has taught us is that the only way to try and explain the technology is with a video. Without the video, they aren't just able to pick it up and grasp it.

This is a big problem with science. Scientists are not very good at telling their story, and media is not very good at telling science stories.

You’ve talked about the importance of resilience in innovation...

We have what we call the rule of seven. Everything for us is a seven, sevens go all through my life. Basically, the rule is that you will be turned down seven times by somebody who should want your technology before they say 'yes'. That means you get knocked down seven times and you've got to stand-up for the eighth. And that's so true.

This is a game of unbelievable resilience and when you get knocked down, you brush yourself off and say, 'Well, at least I know how to dodge that one next time’, and you come back at it with a bit more skill and a bit more story to tell, and try again, until eventually you get there.

So failure is important too?

It's mostly about failure. It's occasionally about success. A scientist's job is constantly failing. Nothing ever works first time. A success is learning from your failure. And if you keep on learning from your failure, eventually the failures will disappear and you will get some successes. So, being a scientist teaches you really, really well how to survive in this game because science is predominantly failures. When we have a failed experiment, we say, 'Wow! Look at what we've learnt there. Isn't that cool?' So we celebrate learning from failures. Success is an accumulation of an elimination of errors.

So has that been good training for the entrepreneurial aspect of Kode?

Absolutely. And it's not training, it personality. You don't go into science unless you can withstand failure. If you can't withstand spending a whole year where everything you've done has turned to custard and then still look on it positively and come to work positively the next day, you won't stay in science. However, because of that rigour, scientists are generally not major risk-takers. So that is a counterproductive characteristic for being in business. You need to be highly flexible, you need to think of lots of different things and you need to take risk. And those are generally things that scientists don't do.

Does that hinder innovation?

Absolutely. But you can solve it with a team. The scientists have their job, the business people have their job, the marketing people have their job. With a micro-company like Kode Biotech, you have to have someone who can do all those things to be able to survive, unless you've got a lot of money.

You say innovation and invention are different, what’s the distinction?

Invention is an aspect of innovation. Innovation is conversion of the invention into something useful. Invention is the easy part. Converting an invention into something useful or something that the public want to use is the really hard part, the really expensive part, and a really different skillset.

If you're focused on innovation, not just invention, you've got to lead your research with an innovation focus. Your innovation has to lead the research. Unless your research is something that can end up doing do this in the marketplace, don't do it. Don't do it means don't do it if you want it to be an innovation. Do it if you want to be an academic project or some other reason. But if you're focussed on innovation, invention has to have a market-lead focus.

So when we are looking at an invention to start [working on], we ask: What would this product look like in the market? How would we manufacture it? Can we do that at scale one day in the future? Would it be able to be stored? What would it look like? How would you inject it in somebody?

We ask all those questions, then we go back and ask, can we make an invention that will meet those requirements? I might be able to make something really cool but only lasts one day on the shelf. No value! It would be abandoned. We would not actually do that research. We would abandon that promising research because it could not result in an innovation that actually would have a utility. So if you apply those business rigours to your research, you will increase your probability of getting an innovation.

But it's a numbers game. Just because it's the best and better quicker, faster, cheaper, doesn't mean that it will actually find a place in the market. Particularly if you have to displace something in the market. That depends on the monopoly of the thing that's in the market, depends on why anyone would want to pay more money to you to have a better thing that what they've currently got. There has to be a competitive market and there has to be a reason that someone wants to pay you money for them to introduce it or for you to invest in it, that would displace another product in the market. So you've got to work out price point, cost of goods, market elasticity, all before you start the invention.

So is Kode Biotech essentially one invention that has spawned many innovations?

One conceptual invention, a platform of invention. There's three parts to our molecule and one part of it can be changed into hundreds of different components. But the molecule has some very simple features, it has a generic structural design.

It's a bit like saying we invented a car. And you've got cars and trucks and buses, but they're all variations of the car. So we invented the car and then there's ambulances and all the different cars that do different jobs and bulldozers. They're all still something that's got wheels and moves forward and backwards. And that's how generic Kode is. It's a platform of a massive family of molecules, each of them can do radically different things. From anti-counterfeiting molecules to diagnostics, to anti-tumour, right through to lubricants. It's the same molecule in its basic structure.

So other people innovate on your invention?

More than that, our innovation is the front-end. We do everything we can to open source and encourage others to invent and create their own innovations on the back of our innovation.

So we invented paint, we then gave it to all the artists in the world and they then create their masterpieces with our paint. The innovation that we won the award for, we did not invent its use, we invented the paint and these people [Agalimmune] figured out that they can use it to treat cancer. Not us. That's our entire model, making available the paint for all the real smart people in the world to go and do cooler things than we could think about ourselves. However, without the paint, they could not do what they do.

What do you have to say to inspiring innovators?

Come along to Innovations Heroes and hear what they've got to say. It's actually really interesting. Things are fairly consistent between us, we've got very similar scars, some of them are much younger in the game, others like Glenn [Martin] and myself have been around a hell of a lot of years. There have been different speeds to market but the scars are fairly consistent. And you can reduce your scars by listening to the battle weary.

It's nice to try and do this for others. If New Zealand's going to become a place of significant innovation, other need to learn from us to educe their failure rate. You can leverage off the success of others with just little things. It might be one or two words, a little gem. 'Ahh, never thought of that!' And that can make all the difference.